FG to Tighten Noose Around Tax Defaulters by Obtaining Bank Details  

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By Obinna Chima
 
The federal government is currently working on modalities to implement the common reporting standards (CRS) in the country, which would enable it to obtain every taxpayers’ information directly from the commercial banks.
The CRS is a standard for automatic exchange of bank accounts information on individuals and certain types of entities. All countries that have implemented the standard will be required to automatically exchange this information on an annual basis.
In August 2017, Nigeria took a step towards implementing the standard by signing the Multilateral Competent Authority Agreement (MCAA) on the CRS.
Implementing the CRS will allow Nigeria to automatically receive information on the bank accounts held in other countries by Nigeria tax residents.
Partner, Tax and Regulatory Services Unit with PricewaterhouseCoopers (PwC), Nigeria, Esiri Agbeyi, disclosed this at the weekend while making a presentation at an event organised by the Securities, Wealth and Asset Management unit of Ecobank in Lagos.
Esiri explained that when the CRS is fully implemented in the country, all banks would have to submit information about their taxpayers’ information, identity numbers and bank verification numbers (BVN), among others to the tax authorities.
With this, the tax authorities can then share such information with any other country that has signed up to the CRS.
She added: “And if they share that information with that country, automatically, that country has to share that information with Nigeria.
“So, it is exchange of information across borders. Nigeria signed up to it in August 2017 because they would need a lot of information to drive the Voluntary Assets and Income Declaration Scheme (VAIDS).”
She explained that the next step required under this arrangement was for Nigerian banks to acquire the technology to drive the CRS for easy collection of data as well as for the tax authorities to have similar technology that they can use to submit such data.
“One of the key requirements is security. So, Nigeria is not there yet. It will take some time to get there, because not all the banks are aware of CRS.
“So, maybe in the next two years, we might have Nigeria fully take on the CRS. Ghana was among the first African countries to sign up to this. So, Ghana will be submitting information already to the authorities this year.
“There is going to be that free flow of information and on the back of that, the tax authorities will come after those who have not taken advantage of the amnesty period provided by VAIDS to prosecute them.”
She pointed out that the country’s low tax base was a major reason for the high interest rate in the country.
“Government is looking to raise taxes from six per cent tax to GDP ratio, to about 15 per cent, because ours is abysmally low when compared with other countries.
“One of the ways they have thought of doing this is through VAIDS.  We don’t have much people as we should have in the tax base. There are a lot of high net worth individuals who do not pay taxes.
“That is the key target of the government and as we progress, it is going to go around to the entire informal sector,” she added.
 
  • Olusola Olusina Micheal

    this is the main reason why looters and the corrupts have been writhing letter that PMB should not contest …VAIDS is the clincher to bring all looters to justice.

    • lord vuga

      Nonsense . do the rich pay tax here? How much tax do your lawmakers pay? The only folks that pay tax faithfully are workers on PAYE and few unfortunate naive coys. VAIDS is just a platform to enrich tax workers.

      • share Idea

        Please allow the people that are excited by propaganda of this administration. On weekly bases, banks are supposed to render returns to CBN and EFCC for any transactions above certain amount say 10m naira. With all these information to both CBN and EFCC, how many have EFCC questioned about their source of funds – none, except people that are not in good books of the administration.

        Is this administration telling us that Tinubu have been transacting and lodging funds from his legitimate income? so with other cabals across the nation.

        The bottom-line is that this administration does not have direction and have not defined policies or template it wants to govern. It just lashes on anything that sounds nice without understanding the fundamental structure behind it.

    • Toby

      Rubbish.